Bankruptcy court has bad news for people owed money by Parade of Homes builder

The court handling a bankrupt Kennewick home builder’s liquidation has bad news for the unsecured creditors owed nearly $7.4 million.

Solferino Homes Inc. doesn’t have enough assets to cover its unsecured debt.

The court is advising the home buyers, contractors and other business partners not to submit claims.

“No property appears to be available to pay creditors,” it said in a notice to creditors.

Solferino Homes, led by Marco Solferino, filed to liquidate under Chapter 7 in U.S. Bankruptcy Court for Eastern Washington in March.

The company said it has $1.1 million in assets and $9.2 million in liabilities, including $7.4 million in debt that is unsecured by real estate or other assets.

Unsecured debt is the last to be paid in a bankruptcy and the court’s warning suggests those creditors will be left with little or nothing when the firm’s assets are sold.

A creditors meeting is at 9 a.m. April 30 at the Richland federal building.

Second bankruptcy for Solferino

It isn’t Solferino’s first bankruptcy.

Federal court records indicate Marco Solferino had a prior Chapter 7 case in 1997, when he lived in Sedro Wooley.

Case files are not available online, but the docket indicates the case wrapped up in August of that year.

Marco Solferino moved to the Tri-Cities and formed Solferino Homes the same year as the Western Washington bankruptcy.

The company’s website is no longer working, but Marco Solferino’s description of the business is archived in Lexis Nexis by ZoomInfo:

“Our company started out with the vision of building beautiful homes and neighborhoods for families throughout Eastern Washington. As time progressed we realized we had the experience, capacity and team who could develop our business into something special,” he wrote.

Solferino Homes specialized in custom-built Mediterranean-themed villas. Its homes were showcased in several editions of Parade of Homes, the luxury home tour organized each September by the Home Builders Association of Tri-Cities.

It is unclear what triggered the bankruptcy.

The attorney handling the case could not be reached. Creditors, including home buyers who placed six-figure down payments, were reluctant to discuss their experiences.

One person familiar with the case said that when buyers hire a firm to build a custom home, it’s typical to provide a cash deposit and sign a construction loan.

Customers could be left having to pay new builders to finish their projects at far greater cost than they initially planned, while remaining responsible for the loans they signed.

“This is hurting a lot of people,” the executive said.

Company assets include lots worth a combined $1.1 million. The real estate secures about $600,000 in bank loans.

Other assets include a 2007 Chevrolet Silverado worth $8,500, a 2014 trailer worth $1,500, a 2002 utility trailer valued at $500 and office furniture valued at $500.

Marco Solferino and his wife personally own a 4,600-square-foot home on five acres in West Richland. Benton County estimates the market value at nearly $700,000. The home is not part of the bankruptcy.